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Broadband Seen As Key To Transforming Eastern Kentucky Economy

Broadband access can be a key conduit to creating economic opportunity for Eastern Kentucky, officials say.

In this small southeast Kentucky town, some 440 workers at Blackboard Student Services use high-speed Internet access to handle more than 2,000 phone calls every day from students worried about their college applications and financial aid.

About 10 miles away, another 465 employees at SourceHOV have converted more than 1 billion pages of medical records into digital files to help ease the backlog of health benefits for the nation's military veterans.

Both companies exist because they have access to the type of high-speed broadband Internet service that most of eastern Kentucky doesn't have because of its mountainous terrain and scattered population. But state officials hope a forthcoming project to lay 3,000 miles of fiber-optic cables throughout the state - which will begin with eastern Kentucky - will be a key piece of transforming the region's economy. The project is slated to cost up to $200 million.

"We've lost so many coal jobs we've got to find alternative jobs to keep our people in eastern Kentucky," said Lonnie Lawson, president and CEO of the Center for Rural Development, which is partnering with the state on the project.

The broadband project, dubbed the Next Generation Kentucky Information Highway, is a key piece of the plan to reshape eastern Kentucky's economy. It has been endorsed by Shaping Our Appalachian Region, the joint project Democratic Gov. Steve Beshear and Republican U.S. Rep. Hal Rogers developed to lead eastern Kentucky out from under its dependence on the declining coal industry.

Wednesday, Rogers joined about 50 eastern Kentucky leaders on a tour of several businesses along I-75 that depend on high-speed Internet, part of what Rogers refers to as "Silicon Holler."

The Kentucky Coal Association says eastern Kentucky has lost 7,000 coal jobs since Jan. 1, 2012. And Jeff Whitehead, executive director of the Eastern Kentucky Concentrated Employment Program, said 23 counties in eastern Kentucky had 13,000 fewer people working in May 2014 than in May 2013.

State lawmakers included $50 million in state bonds and federal money for the project, plus another $20 million from private partners. Rogers said Wednesday the announcement of a contract is "imminent," adding the cables would be up and running in about 18 months.

"High-speed cable ... is the new interstate highway of today," Rogers said. "If that's so, eastern Kentucky, all of it, would be a ripe location for new industry."

Officials at both companies said they located in southeast Kentucky because of the high-speed Internet access, coupled with lower wages. Workers at both companies make between $10 and $15 per hour.

"These folks here, they want the jobs. They want to be able to have a career here where they can raise their families in Somerset," said Ross Rutt, director of operations for Blackboard Student Services. Rutt added that most of the company's managers are Somerset natives who have been promoted from the call center.

The tour was scheduled to visit five companies in southeastern Kentucky, including TrollAndToad.com, a company that sells used video games and other products, and the Kentucky Consular Center, which operates the State Department's Diversity Visa Lottery program.

"These are businesses that were created utilizing Internet capability and we want to show examples of those so that other folks can start thinking, 'Well they built this kind of business; maybe I can build a business,'" Lawson said.

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